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Case 1:15-cv-00372-RP Document 63 Filed 09/22/15 Page 1 of 12

IN THE UNITED STATES DISTRICT COURT


FOR THE WESTERN DISTRICT OF TEXAS
AUSTIN DIVISION
DEFENSE DISTRIBUTED and
SECOND AMENDMENT FOUNDATION, INC.,

Plaintiffs,

v.

U.S. DEPARTMENT OF STATE, et al.,

Defendants.

________________________________________________

Case No. 15-CV-372-RP

PLAINTIFFS MOTION TO STAY PROCEEDINGS PENDING APPEAL


AND REQUEST FOR EXPEDITED BRIEFING SCHEDULE
Plaintiffs move the Court to stay further proceedings pending resolution of their
interlocutory appeal.1
PROCEDURAL STATUS
On August 4, 2015, this Court denied Plaintiffs Motion for Preliminary Injunction. (Dkt.
43). Plaintiffs timely appealed from that order (Dkt. 45), and their appeal is now pending at the
Fifth Circuit under Case No. 15-50759.
The Defendants, acting in their official capacity, have agreed to stay further proceedings
in this Court pending the appeals resolution. But in their individual capacity, the Defendants
insist on proceeding in this Court, having filed a Renewed Motion to Dismiss (Dkt. 61) asking
this Court to find, among other things, that their prior restraint is not unconstitutional.

Pursuant to Local Rule of CV-7(i), the undersigned discussed this motion with opposing
counsel for both official and individual party defendants, who stated that Defendants collectively
oppose the requested relief.
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APPLICABLE LEGAL STANDARD


The filing of a notice of appeal is an event of jurisdictional significanceit confers
jurisdiction on the court of appeals and divests the district court of its control over those aspects
of the case involved in the appeal. Griggs v. Provident Consumer Discount Co., 459 U.S. 56, 58
(1982) (per curiam), superseded by rule on other grounds. When one aspect of a case is before
the appellate court on interlocutory review, the district court is divested of jurisdiction over that
aspect of the case. Taylor v. Sterrett, 640 F.2d 663, 667 (5th Cir. 1981). However, where an
appeal is allowed from an interlocutory order, the district court may still proceed with matters
not involved in the appeal. Id. at 667-68.
[T]he power to stay proceedings is incidental to the power inherent in every court to
control the disposition of the causes on its docket with economy of time and effort for itself, for
counsel, and for litigants. Landis v. N. Am. Co., 299 U.S. 248, 254 (1936). In deciding whether
a stay is warranted for proceedings on matters not directly involved in an appeal, district courts
consider four factors: (1) whether the movant has made a showing of likelihood of success on the
merits; (2) whether the movant has made a showing of irreparable injury if the stay is not
granted; (3) whether the granting of the stay would substantially harm the other parties; and (4)
whether the granting of the stay would serve the public interest. United States v. Baylor Univ.
Medical Center, 711 F.2d 38, 39 (5th Cir. 1983); United States v. McKenzie, 697 F.2d 1225,
1226 (5th Cir. 1983).
Courts do not apply the four factors in a rigid, mechanical fashion. Baylor, 711 F.2d at
39. For example, in Ruiz v. Estelle the Fifth Circuit held that the movant need only present a
substantial case on the merits when a serious legal question is involved and show that the balance
of equities weighs heavily in favor of granting the stay. 650 F.2d 555, 565 (5th Cir.1981).

Case 1:15-cv-00372-RP Document 63 Filed 09/22/15 Page 3 of 12

ARGUMENT
I.

CORE ISSUES PRESENTED IN THE INDIVIDUAL DEFENDANTS RENEWED MOTION


DISMISS ARE SUBJECT TO THE EXCLUSIVE JURISDICTION OF THE COURT OF APPEALS.

TO

In their Renewed Motion to Dismiss, the individual capacity Defendants argue that this
Court must reject Defense Distributeds Bivens claims because Defense Distributed has failed to
show that the application of arms-export regulations to its electronic files violated any clearly
established First Amendment right (Dkt. 61 at 12), failed to show that it was selectively
regulated in violation of any clearly established First Amendment right (Dkt. 61 at 15), failed
to show a violation of any clearly established Second Amendment right (Dkt. 61 at 18), and
because Defense Distributed has failed to show a violation of any clearly established Fifth
Amendment right. Dkt. 61 at 20. Each of these arguments concern issues now within the Fifth
Circuits exclusive jurisdiction during Plaintiffs interlocutory appeal.
Further asking this Court to encroach upon the Court of Appeals jurisdiction in their
Renewed Motion to Dismiss, the individual defendants ask this Court to reject Defense
Distributeds Bivens claims because of the alternative processes already available to challenge
applications of arms-export regulations, which Defendants characterize as an existing process
for protecting the interest. Dkt. 61 at 6. The inadequacy of these alleged procedural protections
underlying Defendants system of censorship is an issue before the Court of Appeals.
Accordingly, this Court must stay any proceedings on Defendants pending motion until a final
decision by the Court of Appeals completely resolves these issues.
II.

PLAINTIFFS SATISFY EACH FACTOR FOR ISSUANCE OF A STAY.


A.

PLAINTIFFS PRESENT A SUBSTANTIAL CASE ON THE MERITS OF ITS APPEAL.

The first factor of the test for issuance of a stay requires an evaluation of whether the
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movant has made a showing of likelihood of success on the merits. Baylor, 711 F.2d at 39. This
factor does not require a district court to conclude that its decision was in error, or find even a
probability of success on the merits. Instead, the moving party need only present a substantial
case on the merits when a serious legal question is involved and show that the balance of the
equities [i.e., consideration of the other three factors] weighs heavily in favor of granting a stay.
Id.; see also Ruiz v. Estelle, 650 F.2d 555, 565 (5th Cir. 1981) (If a movant were required in
every case to establish that the appeal would probably be successful, the Rule would not require
as it does a prior presentation to the district judge whose order is being appealed.); see also
Washington Area Transit Commission v. Holiday Tours, Inc., 559 F.2d 841, 843 (D.C. Cir. 1977)
(noting that a court may grant a stay even though its own approach may be contrary to movants
view of the merits).
In the present case, there is a substantial likelihood of success on appeal because (1) the
Court of Appeals may apply the Supreme Courts recent holding in Reed v. Town of Gilbert
differently than this Court did; (2) the Court of Appeals may find the prior restraint
unconstitutional as-applied because Defendants only impose it against Defense Distributed; (3)
even if the Court of Appeals does not apply strict scrutiny, undisputed facts establish that
Defendants did not provide adequate procedural protections; and (4) because the case presents a
complex legal issue.
1.

THE COURT OF APPEALS MAY APPLY THE SUPREME COURTS HOLDING IN


REED DIFFERENTLY THAN THIS COURT DID.

In Reed v. Town of Gilbert, the Supreme Court held that Government regulation of
speech is content based if a law applies to particular speech because of the topic discussed or the
idea or message expressed. 135 S. Ct. 2218, 2227 (2015). Under Reed, a law that is contentbased on its face will be subject to strict scrutiny even though it does not favor one viewpoint
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over another and regardless of whether the legislature acted with benign motivations when it
adopted the law. The Court explained [i]nnocent motives do not eliminate the danger of
censorship presented by a facially content-based statute, as future government officials may one
day wield such statutes to suppress disfavored speech.). Id. at 2229-30.
Since Reed was issued on June 18, 2015only six days before Plaintiffs filed their Reply
(Dkt. 37 at 14)the federal courts have begun to take stock of how the opinion altered our First
Amendment jurisprudence. On reconsideration after Reed was decided, the Seventh Circuit
reversed itself, finding that the City of Springfield's anti-panhandling ordinance was now
unconstitutional. Norton v. City of Springfield, Ill., No. 13-3581, 2015 WL 4714073, at *2 (7th
Cir. Aug. 7, 2015). Judge Easterbrook, writing for the court, explained that [t]he majority
opinion in Reed effectively abolishes any distinction between content regulation and subjectmatter regulation. Any law distinguishing one kind of speech from another by reference to its
meaning now requires a compelling justification. Id. Other courts have reached similar
conclusions, and many others will undoubtedly follow their lead.2
This Courts August 4, 2015 Order finding that ITAR unquestionably regulates speech
concerning a specific topic, yet is still constitutional, relies on precedents that were abrogated
by Reed. For example, this Court relies on Ward v. Rock Against Racism to reject Plaintiffs
argument that the regulation is content based. (Dkt. 43 at 12, 113 citing 491 U.S. 781, 791
(1989)). See also Asgeirsson v. Abbott, 696 F.3d 454, 459 (5th Cir. 2012). However, As Judge

Cahaly v. Larosa, 796 F.3d 399, 405 (4th Cir. 2015) (4th Cir. Aug. 6, 2015) (Because
of these facial content distinctions, we do not reach the second step to consider the governments
regulatory purpose.); Thomas v. Schroer, No. 2:13-CV-02987-JPM, 2015 WL 5231911, at *5
(W.D. Tenn. Sept. 8, 2015) (The concurrence's unsupported conclusions ring hollow in light of
the majority opinion's clear instruction that a speech regulation targeted at specific subject
matter is content based even if it does not discriminate among viewpoints within that subject
matter.); Rideout v. Gardner, No. 1:14-cv-00489-PB, 2015 WL 4743731, at *9 (D.N.H. August
11, 2015) ([L]ike the sign code at issue in Reed, the law under review here is subject to strict
scrutiny even though it does not discriminate based on viewpoint and regardless of whether the
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Manion noted in his concurring opinion in Norton, Reed injected some much-needed clarity into
First Amendment jurisprudence and, in doing so, should eliminate the confusion that followed
from Ward. Norton, at *2. Specifically, Reed saw what Ward missedthat topical censorship
is still censorship. Id. at *3. This Court did not address the impact of Reed on Ward.
Further, this Court relies on the so-called secondary effects doctrine. (Dkt. 43 at 12
citing Renton v. Playtime Theatres, Inc., 475 U.S. 41, 4748 (1986)). However, the Reed Court
never mentions secondary effects or cites Renton or any of the other secondary effects cases,
creating a conflict that lower courts will have to struggle with.3 This Court failed to
acknowledge Reeds impact on both Ward and Renton. These are both core inquiries that are
necessary to resolve the case, and the Fifth Circuit will soon decide on appeal.
Contrary to the reasoning adopted by this Courts August 4, 2015 Order, the Court of
Appeals may well adopt the reasoning of other federal courts applying Reed, which interpret the
Supreme Courts holding to mean that a content-based prior restraint is subject to strict scrutiny
regardless of the governments underlying motive.
2.

THE RESTRAINT IS ONLY APPLIED AGAINST DEFENSE DISTRIBUTED.

The Courts August 4, 2015 Order does not address the undisputed fact that Defendants
only enforce their prior restraint against Defense Distributed. The Court of Appeals may consider
this fact and other parts of the record as establishing that Defendants impose their prior restraint
against Defense Distributeds speech based on disagreement with the message it conveys. Here,
the complete failure of Defendants to enforce their prior restraint against countless other persons
posting ITAR-controlled technical data on the Internet speaks for itself.

legislature acted with good intentions when it adopted the law.)


3
Eugene Volokh, Supreme Court reaffirms broad prohibition on content-based speech
restrictions, in todays Reed v. Town of Gilbert decision, THE VOLOKH CONSPIRACY (June 18,
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3.

THE LACK OF SUFFICIENT PROCEDURAL SAFEGUARDS IS UNDISPUTED.

Relevant and undisputed portions of the record establish that Defendants do not maintain
the necessary procedural protections required by Freedman v. Maryland, 380 U.S. 51 (1965); see
also Fantasy Ranch, Inc. v. City of Arlington, 459 F.3d 546, 563 (5th Cir. 2006).
The regulations do not set any concrete deadline for decisions,4 do not place the burden
on Defendants to go court to suppress the speech, and do not require that Defendants bear the
burden of proof in court as required by Freedman. Moreover, instead of providing for judicial
review of license determinations, as required under Freedman, the ITAR altogether prohibits
judicial review.
Further evidence that Plaintiffs have a substantial likelihood of success on the merits is
that a federal court in Bernstein v. Dept. of State, 945 F. Supp 1279 (N.D. Cal. 1996), has
already found that the regulations fail to provide necessary procedural safeguards. See Id. at 1289
(The ITAR scheme, a paradigm of standardless discretion, fails on every count.).
4.

THE CASE PRESENTS COMPLEX CONSTITUTIONAL QUESTIONS.

The first prong also favors a stay because of the intricate interactions between the First
and Second Amendments. Indeed, other district courts have stayed or refrained from further
proceedings where a pending appeal serves to resolve complex constitutional questions,
particularly in the Second Amendment area. See, e.g., Wrenn v. District of Columbia, D.D.C. No.

2015), https://goo.gl/5OTo8t.
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The Courts August 4, 2015 Order notes the regulations include a ten day deadline for
providing a preliminary response, as well as a provision for requesing [sic] expedited processsing
[sic] (Dkt. 43 at 16). Plaintiffs respectfully point out that the preliminary response is merely
an agency email acknowledging receipt of a request (Exhibit 1) and, while submitters can request
expedited determinations, final agency determinations take months and sometimes a year or
morea fact which is undisputed by the parties. Further, while the Order states that a
Presidential directive requires a license decision within 60 days of receipt, the Federal Register
notice implementing that requirement contains broad national security exceptions, which provide
Defendants with unbridled discretion to override the deadline.
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1:15-CV-162-FJS, Dkt. 29 (June 24, 2015); Ezell v. City of Chicago, N.D. Ill. No. 1:10-CV5135, Dkt. 19 (April 8, 2011); Pena v. Cid, 2:09-CV-1185- FCD-KJM, Dkt. 28 (August 9,
2010); Pena v. Cid, 2:09-CV-1185-FCD-KJM, Dkt. 24 (Oct. 2, 2009).
B.

DEFENDANTS WILL BE IRREPARABLY INJURED ABSENT A STAY.

Without a stay, Plaintiffs will suffer the extreme prejudice of simultaneously having to
litigate the same issues in two courts, to say nothing of the potential complications that might
arise if further litigation in the district court generated a second interlocutory appeal.
Further, a requisite element of Distributeds Bivens claims is the violation of
constitutional rights. Forcing Plaintiffs to litigate other issues closely-related to the Bivens claims
will waste this Courts time and resources, as well as the parties resources. These issues will
likely be decided, one way or another, by the Fifth Circuit on an expedited basis.
C.

DEFENDANTS WILL NOT BE SUBSTANTIALLY HARMED BY A STAY.

The third prong of the testwhether granting the stay would substantially harm the other
partiesalso favors a stay because a stay will have little, if any, detrimental effect on the
individual party defendants. To the contrary, following this Courts August 4, 2015 Order, all of
the individual party defendants defenses remain. Nothing stands in the way of Defendants from
imposing their prior restraint on thousands of people who appear to be currently publishing
ITAR-controlled technical data on the Internet and other public forums.
Indeed, absent a stay, the individual defendants could suffer substantial harm in incurring
substantial time and costs in litigating issues that will be moot if the Fifth Circuit rules in the
governments favor. A stay thus serves the interests of all parties to the pending appeal by
preserving the existing state of affairs and avoiding the waste of limited resources.

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Moreover, Plaintiffs have not sought to delay this proceeding, but have acted promptly in
timely filing their Notice of Appeal. The appeal of the Courts order is not likely to be lengthy. A
limited delay in proceedings at this early point in the case does not constitute a substantial injury
sufficient to outweigh the factors favoring Plaintiffs. See CBS Emp. Fed. Cr. U. v. Donaldson,
Lufkin, 716 F. Supp. 307, 310 (W.D. Tenn. 1989) (Court finding that delay in trial does not
constitute a substantial injury under test for issuance of a stay).
D.

THE PUBLIC INTEREST IS BEST SERVED BY A STAY

The ITAR does not contain any prepublication approval requirement for public speech on
privately generated technical data. Rather, it was only after the Motion for Preliminary
Injunction was filed on May 11, 2015 that Defendants published a notice of proposed rulemaking
in the Federal Register that would amend the ITAR to add a prepublication approval requirement
on public speech. See 80 Fed. Reg. 31,525 (June 3, 2015).
Defendants proposal received over 9,000 public comments, the vast majority of which
vigorously oppose Defendants creation of a prior restraint under the ITAR. Other public
comments, submitted by respected members of industry and public universities, argue that the
proposed restraint is unconstitutional and respectfully request the Defendants not to impose it.
Many of these comments come from organizations with no involvement in Second Amendment
advocacy, including General Electric Corporation (Exhibit 2), International Business Machines
(Exhibit 3), and many public universities.

The General Electric Corporations comment raises constitutional concerns and


recommends that the restraint be narrowed to apply only to specific types of
information, such as government-funded or classified information. Exhibit 2 at p. 7.

The Semiconductor Industry Associations comment notes: The DDTC prepublication


review requirement would operate as a prior restraint on free speech that applies to all
would-be publishers of ITAR technical data, including to print and electronic news media
outlets, engineering journals, public libraries, publishing houses, trade shows, and
conference organizers. It also applies to persons who post information to electronic
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bulletin boards, company websites, and other online public forums. Exhibit 4 at p. 11
(emphasis added).

The comment by the Association of American Universities et al., which is adopted by


reference in the comments submitted by Harvard and many other universities, notes: the
scope [of the restraint] is not limited to government funding, and could apply to a very
wide range of unclassified information from many different sources and urges the
defendants to withdraw it or substantially limit its scope. Exhibit 5 at p. 4.

Texas A&M Universitys comment notes, Without the significantly and directly related
to [a defense article] qualifier, we believe the definition of defense services is unduly
broad, and may interfere with First Amendment protected expression.. Exhibit 6 at p. 6
(emphasis added).
Many groups, including the Ad Hoc Coalition for Effective Export Control Reform, a

coalition of attorneys with specialized experience in the ITAR, commented that Defendants
proposal represents a significant change by seeking to add a prior restraint that does not yet exist
in the ITAR. Exhibit 7 at pp. 20-22. See also Public comments from Computing Technology
Industry Association, Exhibit 8 at p. 3; William Root, former State Department East/West Trade
Bureau Director, App. Exhibit 9 at p. 1. These comments demonstrate how this Courts order
altered the status quo. The large number and broad scope of public opposition to Defendants
prior restraint presented in public comments establishes that the public interest is best served by
allowing the litigants to focus their time, energy, and resources on resolving constitutional issues
rather than proceeding to Bivens claims and other issues that may follow.
CONCLUSION AND REQUEST FOR EXPEDITED BRIEFING SCHEDULE
For the foregoing reasons, further proceedings on Plaintiffs claims should be stayed
pending appeal.
To facilitate the orderly consideration of the issues before the Court, and, if necessary, to
allow the parties sufficient time to prepare their briefings on the individual defendants motion to
dismiss, Plaintiffs respectfully request an expedited briefing schedule on this Motion.
A proposed form of Order is attached.
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Dated: September 22, 2015

Respectfully submitted,

GURA & POSSESSKY, PLLC

FISH & RICHARDSON P.C.

/s/ Alan Gura*


Virginia Bar No. 68842
Gura & Possessky, PLLC
105 Oronoco Street, Suite 305
Alexandria, Virginia 22314
703.835.9085 / Fax 703.997.7665
alan@gurapossessky.com

/s/ William B. Mateja


William T. Tommy Jacks
Texas State Bar No. 10452000
William B. Mateja
Texas State Bar No. 13185350
David S. Morris
Texas State Bar No. 24032877
FISH & RICHARDSON P.C.
One Congress Plaza, Suite 810
111 Congress Avenue
Austin, Texas 78701
(512) 472-5070 (Telephone)
(512) 320-8935 (Facsimile)
jacks@fr.com
dmorris@fr.com
mateja@fr.com

/s/ Matthew Goldstein *


D.C. Bar No. 975000
Matthew A. Goldstein, PLLC
1012 14th Street NW, Suite 620
Washington, DC 20005
202.550.0040/Fax 202.683.6679
matthew@goldsteinpllc.com
Josh Blackman
Virginia Bar No. 78292
1303 San Jacinto Street
Houston, Texas 77002
202.294.9003/Fax: 713.646.1766
joshblackman@gmail.com
*Admitted pro hac vice

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CERTIFICATE OF SERVICE
The undersigned certifies that the foregoing document was filed electronically in
compliance with Local Rule CV-5(a) on September 22, 2015, and was served on all counsel who
are deemed to have consented to electronic service. Local Rule CV-5(b)(1).
/s/ Matthew A. Goldstein
Matthew A. Goldstein

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